Muthoot aims for Rs 32,000 cr gold loan asset for FY14

Tags: Banking
Muthoot Finance expects to add another Rs 6,000 to Rs 7,000 crore to its assets under management (AUM) in 2013-14, taking the total loan outstanding to around Rs 32,000 crore. The correction in gold prices has put the company into aggressive recovery mode.

In the quarter ended December 2012, the company clocked an AUM of Rs 25,712 crore, growing 12 per cent against the same quarter last year and 8 per cent against the previous quarter.

“By the end of March quarter, we hope the total loan outstanding to go up to Rs 27,000 level, and a year-on-year growth of 10 per cent seems achievable. For the next financial year, we would probably add another Rs 6,000 to Rs 7,000 crore to the AUM,” K P Padmakumar, executive director, Muthoot Finance told Financial Chronicle.

For the additional funds required for lending purposes, Muthoot will mainly depend on bank borrowings and debentures. “Bank borrowing accounts to around 60 per cent of the liabilities and will continue to dominate in 2013-14 also,” he said.

Easing of bank rates will also make the company accelerate issue of debentures – both private and public – by tweaking the issue rates. At the end of December 2012, Muthoot has private debentures of Rs 8,753 crore, against Rs 6,610 crore at the end of the previous financial year. Public issue stood at Rs 1,787 crore, against Rs 1,252 crore in March 2012.

The company has also been aggressively pursuing recovery of loans after the gold prices started correcting. Gross non-performing assets have been growing over the past three quarters to Rs 387 crore from Rs 299 crore at the end of first quarter of the year.

“At present, gross NPA is 1.50 per cent of the gross retail loans, which is manageable. However, we are trying to retain it at this level, especially after the gold prices have come down. We are also offering provision for one-time settlement of the outstanding, foregoing the interest part,” he said.

The recovery drive has got active at call centre, regional and branch level with staff meeting the clients in person.


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